A Diversion by Any Other Name … Is Still Wrong

Before we get started, let’s take a second to remember the victims of last week’s events in West and in Boston, and to pray for all of those affected by those terrible events.

It was a difficult, sad week, but I and a whole lot of others have taken comfort in the heroism that so many Texans and Americans displayed in helping and saving people they hardly knew.

If you didn’t get a chance to contribute to relief efforts or donate blood, there’s still plenty of need and it’s not too late. Start here for a list of places where you can help.

Thanks for all you do, and thanks to the many, many anonymous heroes from the past week for all they did to help their neighbors and us all.

Time for budget honesty

This was supposed to be the session in which Texas got serious about ending budget diversions. This was going to be the year when we’d finally start spending taxes and fees that Texans thought were going to worthy purposes on those actual purposes. We all know Texas can do better when it comes to budget honesty – this was the year it was going to start doing better.

I’ve been working on ending these diversions for a while, so I really hoped budget writers would start using dedicated funds the way the state always promises to use them – on things like parks, hospitals and utility bill relief – and stop hoarding them to cover up other budget holes and issues. The state’s piled up about $5 billion in broken promises through these diversions.

But with five weeks left to go … well, I’m starting to rethink this whole “optimism” thing.

$800 million!

The latest offense concerns what’s known as the System Benefit Fund. If the name makes you sleepy, the contents will wake you up: it’s estimated that the System Benefit Fund will have more than $800 million that’s sitting in a bank, not paying for the necessities on which the state has promised to spend it.

That makes it one of the largest secret piggybanks in state government, and money from that account has been diverted repeatedly over the years to certify more spending in the budget.

On Monday, the Senate voted to divert that money to an even more novel use: a pre-election rebate gimmick. The legislation in question basically declares defeat in the long battle to ensure this money is used as intended.

System Benefit background

System Benefit Fund money was raised over the years through utility fees in deregulated markets. It was intended to go toward rate relief for low-income customers. It pays for things like rate discounts and home weatherization for residents who have trouble paying their bills.

But much of the fund hasn’t gone toward that purpose. Instead, that account built up more and more money that was used to allow more spending in the budget. The $800 million represents the estimated unspent balance for the upcoming 2014-15 budget.

If the Senate legislation approved Monday takes effect (it requires voter approval), most of that huge sum would be handed out as refunds of around $119 per customer, no matter how much that resident or business put into the program.

Another diversion, another broken promise

So, to be clear, this legislation refuses to use the System Benefit Fund for the real, legitimate needs it’s intended to cover. It would liquidate most of the fund’s balance so that accumulated money can never be used for its intended purpose. And it creates a rebate program that’s disconnected from the amount of money Texans put toward this need.

This legislation represents another diversion, another broken promise about ever using the public’s money for the very real needs it promised to cover.

These needs still exist, and Texans have paid hundreds of millions of dollars over the years to address them. But they aren’t being met because those in control refuse to spend this dedicated money on this dedicated purpose that Texans thought they were providing for when they paid this fee.

More of the same

Here’s the worst part: this problem isn’t unique to this issue. Most of this winter’s tough talk about tackling budget diversions is blowing away with the spring.

The leading House bill addressing diversions – the one that’s most likely to pass – would freeze the total amount of them at $4.8 billion, just slightly less than the current $4.95 billion amount.

That’s not real reform. That’s like someone promising he won’t keep drinking any more – while making it clear he won’t be drinking any less either.

In the meantime, my proposed constitutional amendment, which really would begin to end this practice and force legislators to budget more transparently, has been languishing in a Senate committee and subcommittee for more than two months.

This shouldn’t be a hard concept: the legislature needs to spend this money on the purpose for which it was raised.

But even more than that, Texas needs honest, transparent budgeting, not pre-election gimmicks.

Texas can do better than cynical giveaways and more broken promises. Let’s reform the budget with real transparency, honest accounting and a responsible end to these irresponsible diversions.